Punjab records negative growth in diesel sales
Petrol sales also down due to high taxes
Chandigarh, May 7
The high tax rate on petroleum products in Punjab has led to a negative growth in sale of diesel and fall in growth rate in petrol sales. In the past one year, the sale of diesel in the state has shown a decline of 0.3 per cent, while the growth in petrol sales has come down from 10.98 per cent to 5.7 per cent.

Orissa to resume land acquisition for Posco project
Bhubaneswar, May 7
Armed with the final forest clearance order for the mega Posco steel project near Paradip, the Orissa Government today decided to resume land acquisition activities from May 18 even as opponents of the South Korean steel major were preparing to foil the bid.

E&Y, Cognizant to set up units in Kerala
Thiruvananthapuram, May 7
Global consulting and IT companies Ernst and Young (E&Y) Global Shared Services and Cognizant will be setting up their units in Kerela at Infopark Kochi campus, giving a boost to the information technology sector in
Kerala.

Chandigarh, May 7
The high tax rate on petroleum products in Punjab has led to a negative growth in sale of diesel and fall in growth rate in petrol sales. In the past one year, the sale of diesel in the state has shown a decline of 0.3 per cent, while the growth in petrol sales has come down from 10.98 per cent to 5.7 per cent.

With Punjab imposing the highest tax rate on these two fuels in North India, the state is witnessing a poor growth in their sales. The average national growth rate in sale of these fuels is around 12 per cent, but thanks to a tax rate of 32.75 per cent on petrol and 11.68 per cent on diesel, the sales of the two fuels have gone down.

The problem of poor sales is more serious in the districts bordering Chandigarh and Haryana, as consumers prefer to get their fuel supply from the neighbouring state(s) where these fuels are cheaper because of lower tax rates than Punjab. Haryana imposes 20.5 per cent tax on petrol and 9 per cent on diesel.

According to information, a total of 7,87,229 kilolitres of petrol was sold in Punjab in 2009-10, while 8,32,376 kilolitres was sold in the state in 2010-11. In 2008-09, 7,09,289 kilolitres of petrol was retailed through various outlets in the state. This shows that the growth in sales have dropped from 10.98 per cent in March 2010 to 5.7 per cent in 2011. Similarly, in case of diesel, the sales have fallen from 35,53,913 kilolitres in 2009-10 to 35,52,681 kilolitres in 2010-11 - showing a negative growth.

Talking to The Tribune, JP Khanna, president of the Punjab Petroleum Dealers Association, said the main reason for fall in sale of both petrol and diesel was that the state had imposed surcharge of 10 per cent on these two products last year. This surcharge, coupled with high VAT (27.5 per cent on petrol and 8.8 per cent on diesel), cess (1.5 per cent on petrol) and octroi (1 per cent on petrol and 2 per cent on diesel) is responsible for the slow growth in sales. The state government needs to review its tax structure and bring it at par with Haryana and Chandigarh so that the volume increase in sales is there. As the volumes increase, the tax collection will also increase as we will not lose customers to the neighbouring states, he said.

Bhubaneswar, May 7
Armed with the final forest clearance order for the mega Posco steel project near Paradip, the Orissa Government today decided to resume land acquisition activities from May 18 even as opponents of the South Korean steel major were preparing to foil the bid.

"The state government will begin land acquisition work for Posco project from the place where it halted last year in view of a stop work order from the Ministry of Environment and Forest (MoEF). The land acquisition work will be completed within a month," chairman-cum-managing director of the state owned Industrial Infrastructure Development Corporation (IDCO) Priyabrat Patnaik told reporters.

The decision in this regard was taken at a meeting between the Chief Secretary B K Patnaik, IDCO officials and representatives from the Jagatsinghpur district administration. Some senior police officers also attended the meeting.

The IDCO, which was in-charge of acquiring land for different projects, had to abandon land acquisition work at the proposed plant site villages of Posco on August 6, 2010, after the MoEF objected to it based on the recommendation of the N C Saxena Committee which pointed out gross violation of provisions under the Forest Rights Act, 2006.

Claiming that the project had, meanwhile, received support from majority of the local people, Patnaik said the government had retrieved about 11 acres of land during the previous land acquisition effort.  PTI

Thiruvananthapuram, May 7
Global consulting and IT companies Ernst and Young (E&Y) Global Shared Services and Cognizant will be setting up their units in Kerela at Infopark Kochi campus, giving a boost to the information technology sector in
Kerala.

The agreement with the two companies was signed by Infopark CEO Binu Pazoor in the presence of Chief Minister VS Achuthanandan today.

"In the last five years, we have been successful in bringing in global strategic investments in IT in
Kerala," Achuthanandan said.

The companies that set up units in Kerala during the period include
TCS, Infosys, Oracle and HCL, which shows that the state was positioned as a hot IT destination, he said.

Cognizant is signing up approximately one lakh sq ft space and Ernst & Young about 25,000 sq ft space in
Athulya, which was opened a few months back in the Infopark campus.

Global vice-chairman of EY Global Services Tim Eddy said the new space would substantially allow the company to respond to growing demands for shared services from customers worldwide.  PTI

Q. I have availed a housing loan of Rs 2.5 lakh on 12.6.1995 and am still repaying Rs 2,000 every month and availing of rebate u/s 80C. Now I have taken another housing loan for Rs 10 lakh on 13.9.10 for construction of second house in joint name with my spouse. The instalment is fixed at about Rs 15,000 for the second house. My query is that, can we both take rebate u/s 80C in the second house, if I do not take rebate of first house. Both houses are self-occupied.

U/s 24: Deduction up to Rs 1,50,000 is applicable on loans taken for acquiring or constructing a housing property. It is possible to claim this deduction on two or more loans either for the same property or different properties. In any case, the ceiling on total amount of deduction is Rs 1,50,000 in a financial year.

U/s 80C Additional deduction u/s 80C, within the overall limit of Rs 1,00,000 for the repayment made of the principal amount is available.

Payments towards stamp duty, registration fee and other expenses incurred on transfer are also allowable but shall not include:

i) admission fee, cost of share or initial deposit,

ii) cost of any addition, alteration, renovation or repairs carried out after the issue of the completion certificate or the house is occupied by the assessee or it has been let out and

iii) expenditure where a deduction is separately allowable u/s 24.

U/s 23, if you have two houses, only one of them of your choice will be treated as self-occupied and the other as deemed let out. On commercial properties and on houses given on rent, there is no limit on the deduction for interest paid or payable on housing loans.

In the case of the second house which you have taken jointly with your wife, if she has contributed some amount out of her own assets towards repayment, the benefits of both Sec. 80C and Sec. 24 will be available to both of you in the proportion of the capital contributed by each one of you.

Interest on PPF a/c

Q. In the past you had quoted in the Ministry of Finance (DEA) letter No.F-3(9)-PD/72 dated 4.9.72 which states that in the case of deposits by cheque/draft by the subscriber to his PPF account, the date of tender of the cheque will be treated as the date of deposit.

Hence, cheque deposited between 1st to 5th of the month will be entitled to interest of the month.

In this particular case, cheques have been deposited on 3.4.2011. The interest entered in the passbook shows it is for 11 months. When pointed out to the bank (Bank of India) they said the rule has changed, the date of realisation of the cheque/draft to be taken as deposit date. 1st April was a holiday, 3rd and 4th Saturday and Sunday, hence the cheque might have been cleared only on Tuesday 6th April. We hold 7 accounts of self and family - Rs 70,000 @ 8% one month - the interest loss is Rs 466 on each.

Sir, I shall be highly obliged if you could kindly let me know if the above rule has been changed, if not, your advice on the matter, who could be approached?

Incidentally, SBI has given full 12 months interest on the deposits made on 3rd April 2011. If the Rule has been changed, it should apply to all banks holding PPF accounts.

 F.N. Dick

A. Bank of India is right. As per Circular DGBA.CDD.H-7530/15.02.001/2009-10 dt 29.3.10, in order to bring uniformity in the reckoning of the date of deposit in the PPF vis-ΰ-vis all Post Office Savings Schemes, hereafter, when a deposit is made in the PPF account by means of a local cheque or demand draft, the date of realisation of the amount will be the date of deposit. So far, it was the date of tender of instrument at the Accounting Office, provided it was encashed. Where a deposit is made by means of outstation cheque or instrument, collection charges at the prescribed rate shall be payable along with the deposit and the date of realisation of the amount shall be the date of deposit (GSR 690(E) dt 27.8.03).

As regards SBI, it is possible that the cheque may have got cleared before 5th. If that is not the case, you will come to know whether interest for 12 months or 11 months has been paid on the amount of this cheque only when the interest gets credited to the account on 31st March 2012.

Tax on bonds

Q. In one of your earlier columns, you have mentioned the following.

"To save tax on long-term capital gains, one has to invest the capital gain amount not in RBI bonds, but specific capital gains tax savings bonds issued by the Rural Electrification Corporation and the National Highways Authority of India. The REC/NHAI bonds have a lock-in of three years. The maturity amount is tax-free and repatriable.

Please clarify whether the amount at maturity (the capital plus the interest accrued in three years and both capital and interest) are exempt from income tax? Also, alternately if a person invests and prefers to take interest every year during the three years is free of income tax?

In the previous years, I have invested in similar way, and the corporation issued a TDS certificate for the income generated as interest.

 Viswanathan

A. When we mentioned that the maturity amount is tax-free, we meant only the maturity amount (the capital invested) and not the interest accrued. Normally the interest on such bonds is payable every year and is taxable. We are not aware of any issue of such bonds where the interest was payable on a cumulative basis. In other words, the interest on such bonds is paid out every year and when the investor gets back his capital at the end of the term of three years, such capital is fully tax-free.

Two helicopter crashes in a month, loss of precious lives, valuable property and an inordinate delay in locating bodies and wreckage have had damning effect on the Indian civil aviation in general and Pawan Hans Helicopter Limited (PHHL), in particular.

Had 26-year-old operator, PHHL, taken effective precautions and preventive measures against crashes in hilly areas, the latest tragedy in Tawang could have been averted.

Apart from PHHL's twin failures of continuing operations with old aircraft and shoddy maintenance, indeed there is an element of high-handedness and negligence on the part of VVIPs who, in their needless exuberance to reach the destination, coerce pilots to fly in weather conditions, which are far from conducive for operations.

The 30-member Parliamentary Standing Committee chairman Sitaram Yechury, in the 168th and 169th reports to the Rajya Sabha, has stated: "technicians, including pilots, were often put under pressure to ignore minor deficiencies and undertake helicopter sorties".

As B3 helicopter carrying Chief Minister Khandu and four others, including two pilots, went missing more than five days ago, the authorities, including the Air Force and the Army, failed to find the bodies until villagers located the wreckage at 15,000 feet near Luguthang, 60 km from Tawang town.

According to investigation, the bodies of Khandu and one woman could be recognised, while bodies of two pilots were charred beyond recognition.

Another probe has been undertaken but sadly its fate will be the same as of the previous findings.

The PHHL, which started operations in October 1985, has at present 35 aircraft comprising 17 SA-365N Dauphin, 9 Dauphin AS365N3, 3 Bell 407 and 2 MI-172. How many of them are genuinely physically fit for operations is difficult to say at this point of time. The PHHL has to wake up before tragedy further mars its dwindling reputation.